Panasonic Stock Up On Deal To Sell Stake In Automotive Systems Unit To Apollo

(RTTNews) - Shares of Panasonic Holdings Corp. (PCRFY.PK) gained more than 7 percent in Japan on Monday after the Japanese electronics major signed a memorandum of understanding with an affiliate of alternative asset manager Apollo Global Management, Inc. regarding a partnership in Panasonic Automotive Systems Corp. or PAS.

The companies will continue discussions on an exclusive basis with the intention of finalizing the details of the agreement by March 31, 2024.

As per the basic agreement to become strategic partners in PAS business, the company noted that if the deal based on this memorandum is completed, funds that are managed by Apollo will acquire a portion of Panasonic's ownership of PAS. At present, Panasonic is the sole shareholder, and PAS is expected to become an equity-method affiliate of Panasonic.

PAS was established in 2022 as a business entity responsible for Panasonic's Automotive business. It provides advanced technologies such as infotainment systems, to automakers. The company has 61 locations around the world and about 30,000 employees, and generated annual sales of 1.30 trillion yen.

According to Panasonic, there is a rapid shift to electric cars and a significant change to vehicle architecture, and continued investment will be necessary to achieve sustained growth for PAS, especially in software development and electrification, which continue to evolve and advance.

Through the partnership, PAS is expected to gain access to large and new financing opportunities, including for strengthening development of growth businesses.

The company further expects that PAS, through a potential future public listing, will realize continued growth as a major supplier of automotive infotainment and connectivity system solutions.

In Japan, Panasonic shares closed Monday's trading at 10.02 yen, up 7.17 percent.